Some of the recommendations
below are now outdated because of later developments. For example, On May
16, 2006, I received encouragement from the Cromarty Tennis Club when I
began the process to get non-profit status for the CCITC. Both I and the
Cromarty Community Tennis Club were clear that there would be no financial
or any other type responsibility connection between the board and executive
of our two entities. In other words, we were both stand-alone organizations.
As a result, I also resigned from its executive on good terms.

Clearly, I am most appreciative of the Club's encouragement on this matter
and this will be acknowledged in the future as well as we progress.

At that time I also envisioned at least one executive member from the
Cromarty Tennis Club to serve on my Board as a conduit of information.
However, when I sought charitable status from the Canada Revenue Agency,
they made it clear to me that for me to get that status there must not be
even the perception that there was any connection between our two executive
and board decision making bodies. So, I nixed that possibility.

On the other hand, I do expect to draw heavily on Cromarty and other tennis
club members in the area for volunteers, etc. Non-executive members from any
of these clubs may also be asked to serve on our board from time to time.

Index
To The Organizational Issues(Please Click On The Topic Of Your
Choice):

Initially, this
public Cromarty Community Indoor Tennis Centre need be volunteer
operated and maintained - summer and winter - and paid
"permanent staff "must not be, or become, an
issue, though, of course, certain winter programmes, like instruction or
school, could each contain a paid component like that of summer if
there were sufficient public participation and grant revenues to make them cost
effective.

Since 1902, with some
bumps in the road, volunteers have consistently
guaranteed the success of the Cromarty Tennis Club's outdoor summer player and maintenance programme, and, no
doubt, a summer indoor operation at the Centre would achieve the same level of free help
from the same people pool.
Given that it was also volunteers who successfully kept the Cromarty Tennis
Club's outside
courts open for 73 of 90 days of play during the winter of 2005/2006
(January-March, 2006), and who, in previous years, have organized several indoor
winter programmes at North Sydney and numerous ones at CBU, there would
appear to be lots of help here too.

Most importantly, the design of the
public indoor facility must be just as volunteer friendly
as the Cromarty Tennis Club's outdoor summer programme to encourage
an equal level ofparticipation
from the willing. For example,
as with outside play, inside play too must be on a demand basis that is
player driven and player policed with just the right amount of helpful executive oversight.

The Cromarty Tennis Club
need not assume any executive responsibility or burden other than to ensure
that one of their directors serve also on the board of a new, separate,
non-profit, charitable Cromarty Community Indoor Tennis Centre whether
the public building
is or is not physically located on the existing Cromarty property.
Such a cross relational directorship would virtually ensure that valuable
volunteer resources were not divided, or that one organization was not
pitted against the other particularly during the summer months when both
sites would be operating simultaneously.

Such a relationship might
also be beneficial to both the Cromarty Tennis Club and the Centre in that larger scale purchases,
such as of insurance (property and third-party), or of kwh of electricity, etc.
might provide some cost savings.

Because the Cromarty
Tennis Club and the Cromarty Community Indoor Tennis Centre would be
separate organizations, there is no legal or financial connection between
the two. Thus there is no danger that the Cromarty Tennis Club would ever
suffer any financial liability for any actions of the Centre, or visa versa.
See also the section below: Creation of a Charitable Not-For-Profit Trust
(Cromarty Community Indoor Tennis Centre)

Incorporation
of the Cromarty Community Indoor Tennis Centre is
not mandatory for societies, but the benefits, such as limited financial liability for
members, or the creation of a charitable trust, make this an essential decision.
For example, since May 22, 1980, the Cromarty
Tennis Club(registry Id 1258600) has been an
incorporated non-profit body with a legal status of
rights and responsibilities where, among other matters, the
financial liability of
the members is limited.

The fear of some, I believe, is that if the public indoor facility suffered
financial stress during its building or later stages that the Cromarty
Community Indoor Tennis Centre's directors would not want to
assume financial responsibility. However, there is a general test for the
satisfaction of a director's fiduciary duty that ought to ease such an
unease, just as it has for the Cromarty Tennis Club for years now. Clearly, if

"directors
exercise reasonable care when making a decision, the Courts will
generally not hold them liable for simple errors of business judgment
that they may make in the management of the corporation. Traditionally,
the Courts have been reluctant to second guess the manner in which the
directors have exercised their discretion. In fact, in the absence of
evidence to the contrary, the law presumes that directors have acted on
an informed basis, in good faith and with a view to the best interests
of the corporation.

The case law indicates that directors
will not be subject to personal liability for bad business decisions
provided that the following three requirements are satisfied:

the directors informed themselves as
to the relevant facts needed to form a business judgment before
making their decision;

they acted in good faith, in
accordance with law, and in accordance with their duty to act in the
best interests of the corporation; and

In these matters,
the purchase and maintenance of general liability insurance for the
benefit of directors who incur liability in their role as a director is all
that is required.

Having said this,
there is however one area that director's ought to indemnify themselves to
cover situations, where the liability relates to a director(s) failure to
act honestly and in good faith with a view to the best interests of the
Cromarty Community Indoor Tennis Centre once financial decisions are being
made. Here, special directors liability insurance (wrongful acts coverage)
need be purchased. Thus while directors (but not members at large)
are potentially personally liable for the debts of the Society because of a
wrongful act(s), a strong
business plan , realistic legal advice, and special directors liability insurance (EnconDirectorspdf
and SovereignDirectorspdf) could, should, and must allay this fear.

The preferred
manner of keeping the operation and assets of the proposed public facility
distinct from those of any other organization including those of the
Cromarty Tennis Club is
through the Club's creation of a separate
registered charitable not-for-profit indoor tennis trust
under the name "Cromarty Community Indoor Tennis Centre":

"... A trust
is a legal arrangement whereby one person (the settlor) gives or
transfers property (the trust property) to another person (the trustee)
to hold to the benefit of one or more other persons (the beneficiaries).
The settlor, trustee and beneficiary can all be the same person, but
usually two or more persons fill those roles. The trustee can also be a
corporation if it is licensed to carry on trust business in Nova Scotia.
The trustee manages the trust property for the benefit of the
beneficiaries. A formal Trust Agreement or Trust Deed which sets out the
trustee’s obligations and clearly defines the identity of the
beneficiaries and the nature and extent of the trust property is usually
prepared. A trust is not a separate legal person, although it is deemed
a person for purposes of the Income Tax Act (the "ITA"). The assets in
the trust are distributed as set out in the Trust Agreement and
generally do not pass through probate. Trusts established during the
lifetime of the settlor are known as "inter vivos" trusts."
[http://www.professionalreferrals.ca/article-869.html
]

If this new public facility
was in the business of promoting tennis, then, according to the Canada
Revenue Agency, it could not
registered as a charity. However, because the
Cromarty Community Indoor Tennis Centre wishes to provide a certain public
amenity - in its case a public indoor tennis facility
- to benefit the community, it normally would
qualify as a charitable organization under the following category
of charitable purposes: other purposes beneficial to the community in a
way the law regards as charitable.
In other words,
for an organization to be
considered charitable it must provide a tangible public benefit
recognized by the courts as charitable. [http://www.cra-arc.gc.ca/tax/charities/policy/cps/cps-024-e.html
]

In the case at hand, the Cromarty
Community Indoor Tennis Centre would advance indoor winter/summer tennis in educational/recreational ways "beneficial to
the community." Process requires that the trust first apply for a
not-for-profit status (2-4 weeks waiting time) with the Nova Scotia Registry
of Joint Stocks Companies [
http://www.gov.ns.ca/snsmr/rjsc/search.asp ] as a society; then for its charitable status
(6-18 months waiting time) with the Canada Revenue Agency. [
http://www.cra-arc.gc.ca/E/pub/tg/t4063/t4063eq.html ]
To qualify for registration as a charity, the public tennis facility must be
legally established by a trust document . The governing document
identifies the charity, states its purposes as well as provides
information on the organization's structure and internal procedures.

It is highly
recommended that the Cromarty Community Indoor Tennis Centre ensure both
its independence from, and an enduring relationship with, the Cromarty
Tennis Club by including the following in its by-laws:

(1) That one
director only (chair or vice-chair only) must also be a director of
the Cromarty Tennis Club

To facilitate
matters, it is also recommended that the Centre's booking system
be internet based and accessed through the existing
pass
protected Cromarty Tennis Club address
[Web
...]
cromartytennis.ca/bookings (perhaps with enhanced booking software) that has already proved itself
workable when indoor winter play existed in North Sydney.

On May 16,
2006, at
a recorded executive meeting, the Cromarty Tennis Club passed the
following two motions:

(1) That Eric Krause, on behalf of the "Cromarty Tennis Club", apply
to the Nova Scotia Registry ofJoint
Stocks Companies for the incorporation of a non-profit society to be
known as the "CromartyCommunity Indoor
Tennis Centre" at a set-up fee of $35.00 Cnd on the
understanding that asuccessful
certificate of registration (estimated waiting time is 2 weeks) does
not commit the"Cromarty Tennis Club" to
any further financial or other obligation without executive consent.

(2) That Eric Krause, upon receipt of a certificate of registration
for a non-profit society knownas the
"Cromarty Community Indoor Tennis Centre", and on behalf of the
"Cromarty Tennis Club", applyto the
Canada Revenue Agency to register said "Cromarty Community Indoor
Tennis Centre" as aregistered charity on
the understanding that a successful application (estimated waiting
time is6-18 months) does not commit the
"Cromarty Tennis Club" to any financial or other obligation withoutexecutive consent.

This is concerning my telephone
call of May 23, 2006 to reserve the following non-profit society
proposed name: "Cromarty Community Indoor Tennis Centre".

The Cromarty Tennis Club has
authorized the use of this name in a motion passed before the
Executive on May 16, 2006. The motion read:

That Eric Krause, on behalf of
the "Cromarty Tennis Club", apply to the Nova Scotia Registry of
Joint Stocks Companies for the incorporation of a non-profit society
to be known as the "Cromarty Community Indoor Tennis Centre" at a
set-up fee of $35.00 Cnd on the understanding that a successful
certificate of registration (estimated waiting time is 2 weeks) does
not commit the "Cromarty Tennis Club" to any further financial or
other obligation without executive consent.

This letter is to inform you that
the name CROMARTY COMMUNITY INDOOR TENNIS CENTRE has been reserved
with conditions for 90 days.

All required documents relating
to the condition(s) below must be filed at the Registry of Joint
Stock Companies before the name can be registered. If the documents
used to register the business are received and all conditions have
not been met the documents will be returned to the sender and the
business will not be registered.

You have until August 21, 2006 to
file the documents and fees to register your business. If the name
has not been used to register a business by August 21, 2006 it will
be removed from the reserved name list and may be applied for by
anyone. An additional search fee will be required to reserve the
name again. IF YOU HAVE ALREADY REGISTERED THIS NAME, NO FURTHER
ACTION IS REQUIRED AT THIS TIME.

Please note that a
corporation/partnership is required to do business using the exact
name which has been registered at the Registry of Joint Stock
Companies. If a corporation carries on business under a different
name, that business/operating name is also required to be
registered.

CONDITION(S)

The name CROMARTY COMMUNITY
INDOOR TENNIS CENTRE is similar to the existing business CROMARTY
TENNIS CLUB. A letter must be submitted to the Registry from
CROMARTY TENNIS CLUB, giving consent to the registration of the name
in Nova Scotia. If a letter of consent is not available, we will not
permit the name CROMARTY COMMUNITY INDOOR TENNIS CENTRE to be
registered.

IMPORTANT: In using the reserved
name the applicant assumes full responsibility for any risk of
confusion with any existing similar business name or trademark. THE
REGISTRY DOES NOT WARRANT THE AVAILABILITY OF THE NAME AND TAKES NO
RESPONSIBILITY FOR THE USE OR PROTECTION OF THE NAME.

Unless the proposed name is
registered in other jurisdictions it does not necessarily receive
any form of legislative/regulatory protection from other provinces
or jurisdictions. For more information on registering the name in
other jurisdictions consult the province/jurisdiction, your legal or
business advisor.

If you require further assistance
from the Registry of Joint Stocks Companies contact the

Name Reservation Clerk at
(902) 424-7770, or toll-free
at 1-800-670-4357.

The registered
Canadian charity category that the public indoor facility would meet
would be number 56 (Recreation, Playgrounds and Vacation Camps). It is
also critical to note that no more than 49% of the directors/trustees
of the CCITC can be related persons.

The trust's mission
statement:

For the
Cromarty Tennis Club, through an independent trust, known as the
Cromarty Community Indoor Tennis Centre (CCITC), to raise funds to
construct, maintain, and operate Cape Breton’s first indoor facility
(one covered doubles court) designed only for tennis. An all-season
operation, the Centre will feature programmes that without exception
will be CCITC run and designed. Where practical, that design will meet
Tennis Nova Scotia, or Tennis Canada standards.

Built
exclusively for the benefit of the public, with a particular focus on
the young, old, and the challenged, the Centre will provide a
summer/critical winter playing venue for all levels and ages of tennis
players, from novice through seasoned. It will encourage high public
user participation rates through an affordable hourly rate - first come,
first serve - and educational group clinics. It will stress that its
cushioned court is state-of-the-art and exceptionally physically
friendly, to draw in the older player who might hesitate to participate
otherwise.

The Centre will
stress public instruction, at both an hourly and clinic level. At the
hourly level, CCITC trained staff volunteers will provide tennis advice,
knowledge, practical tips, and even racquets upon the asking, at no
additional charge.

In addition,
the Centre will target the younger public, through assorted winter and
summer group clinics. It will maximize the number of operating hours to
what is practical. In particular, the Centre will concentrate on winter
school, winter after school, and winter junior development programmes
based on Tennis Canada training, instructional, and skills upgrading
criteria. Winter coaching clinics would be another priority, as would
other community group initiatives, such as wheelchair and mixed senior
(plus 55) play.

During the
summer, held will be similar group clinics designed to enhance any
Island outdoor programme that requests CCITC help.

Throughout the year, winter and summer,
the community Centre will interact with Cape Breton schools, the Cape
Breton Regional Municipality (regional government), local community
clubs (including tennis), and the public at large in growing the game,
and building a healthy community. To achieve these goals, the Centre
will depend upon volunteers from the local tennis community who have
already shown a keen interest in helping the Centre.

The Centre will
develop a range of varied programmes. Without exception, they will focus upon the
public needs of the community, in particular upon the younger, senior, and challenged player
of any age, or ability. Thus, they would include, but not be limited to, scheduled
group tennis development, wheelchair playing, and mixed senior (55 plus)
doubles play.

Although the Centre's daily operating
hours would depend upon demand, each scheduled programme would receive a
guaranteed number of hours, beyond which more time was always possible. The
Centre would devote all possible resources to achieving their goals.

Some examples (Note - the CCITC building
consists of only one doubles court):

(A) GROUP TENNIS DEVELOPMENT
(Racquets always available upon request, at no charge)

(1) Winter School Clinic
(5-18 years of age)

(a) Different schools with
different tennis days to learn to play tennis and practice
afterwards under supervision (b) Day time sessions
during
school hours -
Five Weekdays: 2 hours per day=10 hours per week

(2) Winter After-School Clinic
(5-18 years of age)

(a) Lessons based on
skills progression to take an individual over time from
beginner to supervised play. Includes an entry-level program
for kids aged 5-11 with the transition from mini-tennis to
full-court tennis (b) Day time sessions after school - Four Weekdays
(4 pm-6 pm), 2 hours per day= 8 hours per week

(3) Winter Junior Development Clinic
(Under 18 years of age)

(a) Under 14 Players:
Designed to help develop athletes beyond supervised play to
an advanced level and tournament play(b) 15-18 Players: Those who have graduated from the
"Under-14" program. A systematic development
plan over time so that older aged
seasoned juniors can fulfill their potential through the
growth of an individual game style under Coach supervision
(c) Day time sessions after school - One Weekdays
(4 pm-6 pm), 2 hours per day= 2 hours per week(d) Weekend sessions - Two Weekend
days, 2 hours per day= 4 hours per week

(4) Winter Coaching Clinics

Coaching Clinics (Prepare
future coaches to take their certification courses offered
by Tennis Nova Scotia and Tennis Canada). The clinic will
utilize local certified volunteers. These future coaches
will volunteer some time to the Centre’s school programmes
as well.

(a) Tennis Instructor (15
years of age and older)

(i) Provides the
knowledge, communication and implementation skills to
set-up and run drills for group lessons from the 1.0 to
2.5 levels (ii) Follows the Tennis Canada Guide: Tennis Instructor
Manual – Sixth Edition September 2006

(1) Wheel Chair Tennis promotion
through introductory clinics(2) The Centre will provide the proper chairs and racquets upon
request, no charge(3) Demand will determine the number of hours

(C) MIXED (MALE/FEMALE) SENIOR (55
plus) DOUBLES PLAY (Racquets always available upon request, at no
charge)

(1) The Centre will set up the
teams and schedule the play(2) Free tennis instructor available to teach basics(3)
Day time sessions - Five Weekdays: 2
hours per day=10 hours per week

-
ITEM 6 -

On June 6 (Amended
August 1, 2006),
the following application was sent to Joint Stocks:

-
ITEM 7 -

On August
3,
the Cromarty Community Indoor Tennis Centre received its
incorporated non-profit society status:

- ITEM
8 -

On August
8,
the Cromarty Community Indoor Tennis Centre received its Canada
Customs and Revenue Agency business number:

-
ITEM 9 -

On
August 9,
the following application was prepared, but returned as incomplete, and subsequently sent
as a revised copy on September 12 [See Item 10 for the August 24 revision
instructions] to
Canada Customs and Revenue Agency in order to register under the Income
Tax Act. The copy sent to Canada Customs did not include the Joint
Stocks September 8 covering letter, or the Joint Stock receipt of
payment of $30.00 illustrated below.

Not Available

Not
Available

n/a

Pages 4-5 of the above
images: Proposed Objects

"Information about the activities of
the applicant

On a volunteer and non-profit basis,
the Cromarty Community Indoor Tennis Centre will seek to achieve a
number of objects:

(1) To raise funds to construct,
maintain and operate 100 percent of the time the first indoor
facility designed for tennis on Cape Breton Island and built
exclusively for the benefit of the general public of all ages
whether novice or seasoned
(2) To charge an affordable summer/winter hourly rate that would
encourage a high public use participation
(3) To encourage all youth through summer/winter school,
after-school, and junior development programmes based on Tennis
Canada training, instructional and skills upgrading criteria
(4) To undertake summer/winter coaching clinics to produce local
instructors to work with the general public in tennis skills
development

There will be no membership
requirements since access is based on an hourly charge.

The building which will house a
single tennis court will be a basic, cost-effective "pre-engineered
rigid framed " steel public facility and is fully described in "A
Feasibility for a Public Indoor Tennis Facility" which is constantly
being updated at
[Web
...]cromartytennis.ca/ccitc/winterbuildingstudy.htm
(April 11, 2006).

Scheduled events will utilize a
fully 7-day, 365-year calendar. The priority use will be tennis play
and tennis instruction. All activities organized by volunteers
associated with the "Cromarty Tennis Club" which has been operating
since 1902 with all kinds of expertise on hand.

The Cromarty Tennis Club url is
www.cromartytennis.ca and at a later date the Cromarty Community
Indoor Tennis Centre will be establishing its own url address.

It must be noted, other than drawing
volunteers from the Cromarty Tennis Club, the two societies are
"completely" separate from each other without any legal of financial
connection."

-
ITEM 10 -

On August
24,
Canada Customs and Revenue Agency noted that the application was
incomplete, and asked for more information in order to register under the Income
Tax Act (all revisions included in Item 9):

-
ITEM 11 -

On
October 2,
Canada Customs and Revenue Agency assigned the received application
file number 3033922 and it will be reviewed in the next 4-6 months:

-
ITEM 12 -

On
July 24,
2007, Belinda Au, Charities officer, Canada Revenue Agency sent the
following reply. She was looking for additional details regarding our
winter clinics.

Thank you
for the letter of July 24, 2007. You
have asked of me three questions
which our website
[Web
...]www.cromartytennis.ca/ccitc/
also answers in particular at
[Web
...]www.cromartytennis.ca/ccitc/WinterBuildingStudyOrganization.htm,
and which portion I have reproduced
below as an attachment (pages 3-6).

I am also
directly answering your questions as
follows (pages 1-2):

(i) The
availability of the Centre is on a
first come, first serve
basis. The members of the Cromarty
Tennis Club will not have
priority. Indeed, no tennis club
will have priority.

(ii) The
Centre will run all
programmes, and each without
exception will be of its own design
for the benefit of the public. Some
examples of these programmes are the
winter school clinic, the winter
after school clinic, the winter
junior development clinic, and the
coaching programs. The Centre will
also be developing other similar
type programmes.

(iii) The
Centre will maximize the number of
practical operating hours devoted to
the above winter clinics. You have
asked for what percentage of the
Centre’s operating hours will be
devoted to these particular clinics.
The percentage here will be as high
as possible, but until we present
our programme, together with a
functioning building, to the schools
in the area, the exact percentage is
difficult to determine.

(a) For
example, the planned hours of
operation for the Centre’s single
doubles-court are from 7 am to 11
pm, 7 days a week. The number of
schools that wish to participate in
our clinics during school hours,
Monday-Friday, will ultimately
determine the number of hours for
this component. I expect an
enthusiastic participation rate
given that the local schools already
send out students on a daily basis
for skiing excursions, etc. I see an
initial 2 hours per day on our
single court, but the hours will
grow, as our programme becomes
better known.

(b) The
CCITC will design its winter
after-school programme based on
a proven outdoor success during the
month of June over the last number
of seasons at a number of clubs on
the island. Two hours per day,
Monday-Friday will certainly see a
full capacity response. In addition,
the Junior Development Clinic
will require at the least another 2
hours on Saturday and 2 hours on
Sunday in addition to its weekly
hours.

(c) The
winter coaching clinics will
initially require at the least 1
hour on Saturday and 1 hour on
Sunday, and again the Centre plans
to expand the hours if a greater
demand arises. We will be actively
seeking potential coaches through
advertisements, etc.

At this
time, I would also like to point out
that the Centre has other
instructional programmes aimed at
the challenged (such as wheel
chair), the senior (over 55), and
the hourly rental player (first
come, first serve).

Eric Krause
received a call from CCRA on November 28, 2007, that the
CCITC has received Charitable Status on all points except Junior
Development. JD will be reduced to an incidental activity or
upgraded to meet the standard. CCITC will send by mail the
approved objects of the CCITC.

-
ITEM 15 -

Eric Krause,
Director/Chairman, CCITC,
received a letter from the Canadian Revenue Agency (CRA)
dated January 24, 2008, detailing the information he had submitted that
the CCITC qualified for Charitable registration provided it limited its
activities as indicated below, and operated in the manner described, and
amended its Memorandum of Association through a Special Resolution fully
certified by the Registrar of Joint Stock Companies:

-
ITEM 16 -

On April 3, 2008, Eric Krause,
Director/Chairman, CCITC,
received the certified materials from Joint Stocks that on April
4, 2008, he forwarded to Belinda Au, Charities Officer, Ottawa:

The
Cromarty Tennis Club should support the creation of a separate registered charitable not-for-profit
public indoor tennis trust under the name Cromarty Community Indoor Tennis Centre
- with its own board of directors - to
encourage and accept tax deductible donations; and to keep the operation, assets, activities, books,
and records of the Centre distinct from those of the Cromarty Tennis
Club or any other organization. While there would perhaps be
some cross directorship with the membership-based Cromarty Tennis Club
to ensure a relational connection, the creation of a trust, with its own
non-Cromarty-Tennis-Club controlled board, its distinctive name, its
clear separation based on a different clientele (hourly fee based) and
location (indoor tennis building) - plus a financial firewall between
the two bodies - would ensure that the Cromarty Tennis Club would not
incur any financial or other liabilities with respect to the activities
of the public Centre. The financial firewall would also ensure
that none of the Centre's assets could be used to benefit the Cromarty
Tennis Club, or else the
Canada Revenue Agency
could revoke the Centre's registered charitable status.

According to
the Canada
Revenue Agency:

(1) Registered
charities are required to file an annual information return (within
6 months of its year-end) with the
Canada Revenue Agency, a portion of which is available to the
public, and must meet certain requirements of the Income Tax Act
concerning their expenditures and activities.

(2) Directors /
trustees and like officials are persons who govern a registered
charity. These persons hold positions that are usually identified in
an organization's governing document (e.g., president, treasurer and
secretary).

(4) Under the
Income Tax Act, a registered charity must devote substantially all
of its resources to charitable activities or charitable purposes.
Resources includes financial, material and human resources.

(5) Under the
Income Tax Act, the Canada Revenue Agency can provide to anyone that
requests it, a copy of the charity's governing documents, including
its statement of purpose.

(c) Benefits

According to
the Canada Revenue Agency:

(1)
Registration under the Income Tax Act allows an organization to
issue official receipts for gifts received. This reduces the
individual donor's income tax payable, and it reduces the taxable
income of a corporate donor.

(i)
At least 50% of the funds it receives must be from donors
who are not related persons(ii) The transfer of property in the form of cash or
gift-in-kind (equipment, shares, land, etc.) must be voluntary
without any benefit all provided to the donor

(2)
Once
the organization is registered, it is exempt from paying income tax
(under Part I of the Income Tax Act).

According to the Canadian
Revenue Agency there is a difference between a charitable
organization and a public or private charitable foundation.
For example, a philanthropic grant-making foundation

"is
a registered charitable foundation that makes grants to Canadian
charities and to those organizations recognized by the federal
government as “qualified donees”. A foundation must annually disburse
3.5% of its investment assets (averaged over two years and beginning in
taxation years after March 22, 2004) and 80% of any receipted donations
for the previous year with the exception of bequests and gifts received
with a direction to hold for at least ten years ... Community
foundations are public foundations that focus on building community
endowments and supporting a wide range of charitable activities in
specific geographical communities. There are also special purpose
foundations that focus on particular purposes, such as the environment
or women’s issues. These foundations, like community foundations, accept
gifts and manage donor-designated funds. Other public foundations
include government foundations, corporate foundations and foundations
connected to service clubs ...

All registered
charitable foundations must grant to registered Canadian charities. Many
charitable organizations who have the word foundation in their title are
not designated by CRA [the Canada Revenue Agency] as foundations. They operate as regular charities.
Others were established to raise funds that are given to a single
charitable organization or institution, such as a hospital or university
." [
http://www.pfc.ca/cms_en/page1096.cfm ]

As such, the creation of
a foundation is clearly beyond the scope of this report, though, as a
registered charity, the proposed Cromarty Community Indoor Tennis Centre
would be a qualified "donnee" to receive a grant or gift from a
philanthropic foundation!